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How does the spouse or common-law partner with the higher net income claim child care expenses?

by TurboTax1 Updated 1 week ago

The CRA requires child care expenses to be claimed by the spouse or common-law partner with the lower net income unless one or more of the following conditions are met during the tax year:

  • The supporting person with the lower net income attended school part-time or full-time.
  • The supporting person with the lower net income was incapable of caring for children because of a mental or physical infirmity.
  • The supporting person with the lower net income was in prison for at least two weeks.
  • You were separated from your spouse or common-law partner for at least 90 days due to a breakdown in your relationship.

To claim child care expenses on the return of the spouse with the higher net income under one of the preceeding conditions, select your edition of TurboTax, then follow these instructions.

  1. Enter your spouse’s and dependant’s personal info along with yours, in response to the personal info questions in the introductory interview.
  2. Review the Your personal info summary screen and continue.At the Tax home screen, select Tax profile > Your tax profile and answer the tax profile questions.
  3. At the Tax home screen, select Income > your income topics (such as T4 Employment income) and answer the income questions.
  4. At the Tax home screen, select Deductions > Additional Dependant Information and answer the questions.
  5. At the Tax home screen, under Add to your return enter child and select Child care expenses intro.
  6. At the Child care expenses screen, select Yes, and since you are the higher income spouse, select Yes again.
  7. At the Child Care Situations screen, select the box(es) applicable to the lower income person, and enter the applicable number of weeks or months.
  8. At the Child Care Situations screen, enter any child care expenses that the other person with the higher net income deducted on line 21400 of their 2024 return.
  9. At the Child Care Receipt Summary screen, select Enter New Receipt.
  10. At the Let's get your child care receipt details screen, complete the child care receipt.

Select Enter New Child Care Receipt and complete it, or select Done With Receipt as applicable. Once you are done, TurboTax will apply the child care expense deduction.

EasyStep interview:

  1. If you’re preparing your returns:
    1. Together, enter your spouse’s information in the Introduction and Profile sections of the interview.
    2. Separately, enter your spouse’s information in the Introduction section of the interview, at the info about your spouse or partner screen.
  2. At the Dependants Summary screen, answer the questions. 
  3. Select either Enter New Dependant or Done With Dependants as it applies to you, and continue.
  4. Select Deductions & Credits from the menu and select Child care profile.
  5. At the Claiming Child Care screen, select Yes.
  6. At the Claim child care screen, select yourself, as you are the higher income earner and your spouse or partner meets one of the conditions that qualifies you to claim the child care expenses.
  7. At the Child Care Situations screen, select the situation and enter the number of months or weeks that apply.
  8. At the Child care receipt summary screen, select Enter New Receipt for You.
  9. At the Let’s get your child care receipt details screen, enter the required info. 

Forms method:

  1. If you’re preparing your returns together, at the TurboTax - Personal Information screen, check the box for Process spouse’s return as well? Then enter the identification info for you and your spouse.
  2. Select the Forms or T-Slips button next to your spouse’s name. Then, select your spouse’s income form or slip (for example, T4) and enter their income information.
  3. If you’re preparing separate returns, enter your spouse’s income information on your T1 General, under the section, Information about your spouse or common-law partner.
  4. Each spouse must complete and file a Form T778.
  5. If you’re preparing your returns together, select the Forms button next to your name. Then, select Form Lookup.
  6. Type T778 into the search field and select T778 from the options that appear. Enter your information. 
  7. Repeat steps #5 and #6, for your spouse.
  8. If you’re preparing your returns separately, open the Forms menu and type T778 into the search field.
  9. Select T778 from the options that appear.
  10. Enter your information into the form, as required. If you’re the higher income spouse, complete Part C.

Note: The spouse with the higher net income must complete part C. If a a situation listed in Part C applies, the child care expenses will be claimed on the return of the spouse with the higher net income.

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